– Panelists emphasize that Local Content initiatives are vital for reaching sustainable development goals
SBM Offshore, a prime contractor for ExxonMobil Guyana, hosted the insightful “Let’s Talk Local Content” workshop on February 22, 2024 at the Guyana Energy Conference and Supply Chain Expo. The event provided stakeholders with valuable information about SBM’s procurement process, compliance, local content initiatives, and supply chain opportunities to stakeholders in Guyana’s burgeoning oil and gas sector. It also featured addresses by Dr. Martin Pertab, Director of the Local Content Secretariat (LCS), and Mr. Bobby Gossai, Senior Petroleum Coordinator at the Ministry of Natural Resources.
In his address, Dr. Pertab highlighted the LCS’s role in implementing the Local Content Act and ensuring priority for Guyanese companies in providing goods and services. “In 2023, based on the submission of the various annual plans submitted by companies, somewhere around 44, we have seen a total spent on the 40 carved-out areas somewhere around USD560 million. That represents a 25% increase when compared to 2022.”
He also noted the creation of around 975 new jobs in 2023, a 3% increase from 2022. The total employment for the companies reporting to the LCS was about 4,106 persons, and 6,000 persons with smaller Tier-1 and Tier-2 companies included. The LCS has reviewed the annual plans for local content from 30 out of 44 registered companies this year, indicating procurement opportunities worth USD550 million in the 40 areas carved out for Guyanese companies.
The Secretariat has initiated a public sensitivity outreach to engage with local organizations and agencies across Guyana. The aim is to discuss the Local Content Act’s impact on business operations since its implementation two years ago and to understand the emergence of new services. According to Dr. Pertab, “We also would use [the outreach exercise] as an opportunity to better understand the emergence of new services. We have seen quite a lot of services that have emerged that are not under the local content law, and this exercise intends to interact with those service providers, better understand capacity, etc.”
Dr. Pertab announced the development of a Local Content App, set to launch by Q3 2024, to connect local suppliers with oil and gas companies. This initiative aims to bridge the information gap experienced by locals in accessing Requests for Information (RFIs) and enhance communication between companies and suppliers.
The LCS is also working to level the playing field by boosting the competitiveness of women-owned firms and small-to-medium-sized local companies. In 2024, the LCS is expanding a paid internship program for young Guyanese, aiming to extend the initiative to all technical training institutions in the country. The program provides training in specialized oil and gas skills to Guyanese in all administrative regions, Dr. Pertab said.
He added that, based on a positive assessment, the Secretariat will continue to uphold the 45-day payment deadline for oil companies to local suppliers and promote joint ventures and business consortia involving expatriate companies and local firms.
Economist and Senior Petroleum Coordinator at the Ministry of Natural Resources, Mr. Bobby Gossai, praised the progress in local content and other crucial aspects of the oil and gas industry since the National Assembly passed the Local Content Act in December 2021. He highlighted the role of local content in boosting the economy, now one of the fastest-growing in the world. He emphasized the success of the local content philosophy of the Government of Guyana, the Ministry of Natural Resources, and the LCS in driving economic growth and development.
Gossai said the government focused local content policy and laws on three vital areas: enhanced procurement activities for local companies; capacity building for the local workforce; and employment opportunities. To further this, the Government of Guyana plans to conduct a series of stakeholder engagements in 2024 to understand the impact of oil and gas and local content on all sectors of the economy.
The primary objective is to improve or add to the 40 priority areas for local content and spin-off economic benefits. Preliminary assessments indicate that initial targets have been met or surpassed, and data from these engagements will inform the refinement of initiatives for new opportunities and benefits for the Guyanese people and sustainable economic growth for all sectors of the economy.
The government will use stakeholder feedback to strengthen partnerships, collaborations, and networking for the mutual benefit of all players in the local economy. This process will explore positive linkages across suppliers and producers in the oil and gas sector and beyond to reinforce them for everyone’s benefit. An integral part of this process will be strategic engagements with stakeholders to identify capacities that need to be continuously built out through expedited and improved training and education.
Gossai emphasized the government’s approach of combining increased Foreign Direct Investment with expanded local content. He stressed the importance of capturing local valuation of investment into Guyana and ensuring reinvestment back into the growing economy.
Speaking about evolving business opportunities, Gossai highlighted the government’s efforts to make doing business in Guyana easier and to unbundle services. He emphasized the importance of providing businesses with a transparent and fair opportunity to be part of the value chain, whether it’s procurement activity, training activity, or employment activity.
“We’re talking about the ways in which we can make doing business in Guyana better, easier…we’re also looking at the unbundling of services…as long as your business can be able to be part of that value chain, we want to make sure that you have a transparent and fair opportunity to see if you can be part of that business…procurement activity, training activity or employment activity,” he said.
